Altra Reports Third-Quarter 2020 Results

10/23/20

BRAINTREE, Mass., Oct. 23, 2020 (GLOBE NEWSWIRE) -- Altra Industrial Motion Corp. (Nasdaq: AIMC), a leading global manufacturer and supplier of motion control, power transmission and automation products, today announced unaudited financial results for the third-quarter ended September 30, 2020.

Q3 Financial Highlights

  • Third quarter 2020 net sales were $437.8 million, down 1.2% compared with $442.9 million in the third quarter of 2019. Power Transmission Technologies (PTT) segment sales were down 9.6% and Automation & Specialty (A&S) segment sales were up 7.1% compared with the prior year.
  • For the third quarter of 2020, the Company reported net income of $38.3 million, or $0.59 per diluted share, compared with net income of $25.7 million, or $0.40 per diluted share, in the third quarter of 2019.
  • Non-GAAP Net Income in the third quarter of 2020 was $56.5 million, or $0.87 per diluted share. This is compared with Non-GAAP Net Income of $44.3 million, or $0.69 per diluted share, in the third quarter of 2019.*
  • Non-GAAP Adjusted EBITDA in the third quarter of 2020 was $101.8 million, or $23.3% of net sales, compared with $89.0 million, or 20.1% of net sales, in the third quarter of 2019.*
  • Operating income margin in the third quarter of 2020 was 14.9%, compared with operating income margin of 11% in the third quarter of 2019. Non-GAAP operating income margin in the third quarter of 2020 was 19.6%, compared with 16.5% in the third quarter of 2019.*
  • Cash flow from operations for the year to date period ended September 30, 2020 was $161.8 million, compared with cash flow from operations of $180.4 million for the same year to date period in the prior year. Non-GAAP Free Cash Flow for the year to date period ended September 30, 2020 was $137.5 million, compared with Non-GAAP Free Cash Flow of $143.5 million for the same year to date period in the prior year. Non-GAAP Adjusted Free Cash Flow, which excludes the impact of the interest rate swap termination payment, was $172.2 million and $143.5 million for the year to date periods ended September 30, 2020 and 2019, respectively.*
  • Paid down $60.0 million on the Company’s outstanding term loan in the third quarter of 2020. At the end of the third quarter, Altra’s cash balance and availability under the revolving credit facility were $238.7 million and $294.8 million, respectively.*

Management Comments

“We turned in another excellent quarter as we capitalized on greater-than-expected demand strength, leveraged our market leadership to outperform in several businesses and drove significant improvements to the bottom line,” said Carl Christenson, Altra’s Chairman and Chief Executive Officer. “All of our operating businesses exceeded expectations, with demand especially strong for Class 8 trucks in China, and in the medical and renewable energy markets. Our aggressive cost-reduction actions led to excellent margin performance, strong cash flow generation and effective debt reduction. I continue to be amazed by the resilience and dedication of our team as they maintained safe workplaces across the organization, delivered innovative products to customers, and focused on future growth opportunities, all while delivering these excellent results.

“We recently passed the two-year anniversary of Altra’s transformative merger with four of Fortive Corporation’s Automation and Specialty (A&S) businesses and we are delighted by the success of our integration from both a cultural and business standpoint. The broad diversity of our end markets as a result of the merger has clearly helped mitigate the financial impact of the current economic environment. Now, we are executing on our strategic plans to drive organic growth across our end markets, capitalizing on our enhanced cash-generative business model and we are enthusiastic about the increasing pipeline of opportunities from cross-selling activities.

“We are confident about our future as we close out 2020, and have raised our annual revenue and EPS guidance. Additionally, as a result of our growing confidence in our end markets and our strong cash flow performance, Altra’s Board of Directors approved an increase to the quarterly dividend by 50% to six cents per share. Longer term, we are excited by Altra’s growth opportunities and are increasingly confident about Altra’s ability to thrive as a premier industrial company for the long term,” concluded Christenson.

Business Outlook

Altra is raising its guidance for revenue, GAAP EPS, non-GAAP EPS, non-GAAP Adjusted EBITDA and non-GAAP Adjusted Free Cash Flow. While it is difficult to predict the severity and duration of the pandemic, this guidance is management’s best estimate and practical assessment of the financial impact of COVID-19 to the Company’s business at this time.

Altra is updating guidance for full year 2020 as follows:

  • Full-year 2020 sales in the range of $1,690 million to $1,710 million, up from prior guidance of $1,580 million to $1,640 million.
  • GAAP diluted EPS in the range of a loss of $0.55 to a loss of $0.46, compared to prior guidance of a loss of $1.16 to a loss of $0.94.
  • Non-GAAP diluted EPS in the range of $2.70 to $2.82, up from prior guidance of $2.05 to $2.30.*
  • Non-GAAP adjusted EBITDA in the range of $355.0 million to $370.0 million, up from prior guidance of $305.0 million to $330.0 million.*
  • Tax rate for the full year of approximately 20% to 21% (compared to prior guidance of 21% to 23%) before discrete items, capital expenditures in the range of $34 million to $40 million (compared to prior guidance of $40 to $45 million), and depreciation and amortization in the range of $125 million to $128 million (compared to prior guidance of $124 to $127 million).
  • Non-GAAP Adjusted Free cash flow in the range of $210 million to $225 million, up from prior guidance of $160 million to $200 million.*

About Altra Industrial Motion Corp.

Altra Industrial Motion Corp. is a premier industrial, global manufacturer and supplier of electromechanical power transmission, motion control and automation products, including highly engineered power transmission, motion control and engine braking systems and components. Altra's portfolio consists of 27 well-respected brands including Bauer Gear Motor, Boston Gear, Jacobs Vehicle Systems, Kollmorgen, Portescap, Stromag, Svendborg Brakes, TB Wood's, Thomson and Warner Electric. Headquartered in Braintree, Massachusetts, Altra has approximately 9,200 employees and over 50 production facilities in 16 countries around the world.